Can a non-profit organisation qualify for a business loan?

Non-profit organisations can qualify and obtain business loans if criteria set by lenders are met. Non-profits may seek loans for capital funding purposes (infrastructure development, capacity building) and/or to fund a project related to its mission.

Although lenders often consider the non-profit organisations’ financial position, credit rating, and sustainability, they review total assets and liabilities, income sources, how the organisation pays loans. They also check for loan purpose, and legal structure of the non-profit. Lenders may ask for collateral or guarantees, while others are willing to work with non-profits unsecured loans using proven track records and financial viability.

Non-profits should have clear business plans showing loan use and repayment ability, along with transparent financial records, tax returns, and proof of tax-exempt status. Government schemes, grants, or concessional loans may also support funding needs.